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Can Macworld Survive Without Apple?

By Eliot Hochberg (eliot@high-mountain.com), October 23, 2002

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It has been announced by IDG that Macworld is officially moving back to Boston after three years at the Javitz Center in New York City. What is Apple’s reaction? They say they won’t show.

“Today IDG announced plans to move Macworld New York to Boston in July of 2004,” the company said in a statement. “Apple disagrees with this decision, and will not be participating in Macworld Boston. Since IDG is no longer investing in New York, we now need to re-evaluate our participation in Macworld New York 2003.”

Originally, the move to New York was prompted by the Macworld event outgrowing the Boston facilities. However, high costs and a lagging economy have caused many exhibitors (including high profile developers like Adobe and Macromedia) to pull out of New York in recent years, and it finally got to the point where IDG had to reduce its own costs. In a time like this, it seems like a prudent decision. So what will happen to the convention now, and why would Apple pull out?

Looking at the European Apple Expo, we can see that at least one possibility is complete collapse, but it isn’t a truly fair comparison because in that situation Apple originally said they would participate then pulled out more than once at the last minute. Still, it’s clear that not having Apple at a major Mac event makes it not such a major Mac event.

Macworld has been around for 18 years. It isn’t likely that it will just die because Apple isn’t showing, but it does seem like a major portion of its draw will be removed. The East Coast Macworld event has been in the shadow of the West Coast event due to having more of the major announcements happening in San Francisco. This can likely be attributed to Apple’s proximity to the West Coast city; but since the event moved to New York, Apple has increasingly made major announcements there. With Apple not participating on the event floor, will this change? Or will Steve Jobs still give the keynote speech? It would seem unlikely that if Apple doesn’t have a presence that Jobs would make any further major announcements. In fact, one would guess that any summer announcements would likely be made after that event was over, just to prove a point.

What could Apple’s problem possibly be? Is it that they need to be near a flagship store in order to have an event? That doesn’t seem likely, although there are certainly possibilities of cost issues. However, Apple does have two stores in Massachusetts, so it would seem that these issues could be taken care of. Perhaps Apple feels there needs to be a store in close proximity to the convention for an increased possibility of making sales. A quick review of the locations shows that in fact, Apple’s SoHo store, while a quick cab ride away, isn’t in very close proximity to the Javitz Center; it might as well be off Manhattan as far as trade show visitors are concerned, so this isn’t a likely scenario.

Assuming that IDG charges Apple for its participation, that cost would likely be less, so that cost can’t be the issue. In addition, it might be good for attendees; the cost to them will surely be less, even if only in the cost of food and lodging. The other exhibitors will certainly save money as well, perhaps encouraging those who dropped out to return. New York may have more press available, but that never seemed to be a problem with previous Boston Macworlds.

It seems more likely that this pulling out is not an issue of money or practicality, but one of politics. Perhaps IDG made its decision without asking Apple first. Or perhaps Apple made a request of IDG, such as waiting until 2005 to move, and IDG denied it. Maybe someone insulted Steve Jobs’ fashion sense. Some other sites have suggested, based on their sources, that Apple and IDG did in fact discuss this move quite a bit before IDG made its announcement, and that would only make sense. Think Secret and Mac OS Rumors both suggest that Apple’s move is a negotiating tactic on Apple’s part, but to gain what concessions is currently unclear; a better price, better terms, or more control are all likely candidates. MacCentral.com (which is owned by IDG), in dramatic fashion, reports that IDG might not allow Apple to participate in Macworld SF if they follow through with any desertion of the Boston trade show.

This new development seems to be a pretty clear bluff on IDG’s part. After all, as stated before, any major trade show without Apple’s participation will be far less major, and probably not draw the same exhibitors that a show with Apple would draw. All Apple would need to do is plan a show with another company, and that would be that. However, it’s unlikely that an alternate show could be set up for January as there simply isn’t enough time. By the same token, IDG couldn’t afford to lock out Apple for this January’s show; they would certainly lose a great deal of money on, if nothing else, the keynote speech, which sells out at every show.

The bottom line is this: Apple rarely takes this sort of action without some reason, even if only a petty one. MacCentral suggests that perhaps Apple is using this move to Boston as a tactic to save money and get out of one trade show a year without losing face by admitting they can’t afford it. This is plausible, considering how Jobs has reacted to past situations where other companies have embarrassed Apple; but how likely is it? Apple has $4 billion in the bank, and has opened a chain of stores just to get the Mac message out there. Surely Apple can see the value of these expos in getting people interested in the Mac platform, and almost every event gets major press coverage. No, low funds on Apple’s part doesn’t seem likely. What seems far more likely is that there is something Apple wants from IDG, and that Apple feels they have IDG over a barrel.

As I see it, if IDG follows through with its threat, Apple will likely call their bluff, and Apple will win. They would have no problem working with another company or even setting up an expo themselves, and how much would Apple love having complete control over every detail of pre-show security? It’s possible some potential exhibitors might balk at an Apple-run expo, fearing that Apple might be too controlling. What is important to see here is that IDG is not, by all appearances, in a very strong negotiating position. Time will tell, but I’d be willing to wager that if IDG follows through in blocking Apple from Macworld San Francisco this January, Apple will likely either save its major announcements until after the show is over; or else hold a mini trade show of its own, with Steve Jobs making whatever announcements he has planned to conflict with a key event at Macworld like the keynote speech. It would certainly be held near the expo, and would likely be free. No one would go to the Macworld keynote, and Apple would win, because it would be very easy for Apple to get another trade show organizer to pick up the slack for 2004.

It’s clear that Apple has the upper hand here. All that’s left is to wait and see how this drama unfolds.

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